European stock markets closed sharply lower on Wednesday, the 8th, amid rising tensions between the United States and Iran and remarks by US President Donald Trump that the ceasefire "is over." The Madrid stock exchange led the losses after the Republican stated he no longer wants trade relations with Spain.
In London, the FTSE 100 fell 1.66% to 10,489.04 points. In Frankfurt, the DAX dropped 2.35% to 24,865.67 points. In Paris, the CAC 40 lost 2.18% to 8,252.66 points. In Milan, the FTSE MIB fell 1.22% to 51,817.25 points. In Madrid, the Ibex 35 fell 2.76% to 19,098.63 points. In Lisbon, the PSI 20 declined 1.77% to 9,085.24 points. Quotes are preliminary.
The pan-European Stoxx 600 index fell 1.76% to 634.90 points in the session, with the technology sector recording losses of 3.62%. In contrast, the energy sector advanced 1.39%, supported by the surge in oil prices amid the possible end of the ceasefire between Washington and Tehran. Trump signaled a possible expansion of the offensive tonight, while Iran promised to retaliate "twice as much."
In addition to the new threats against Iran, the Republican commented on Wednesday on the sidelines of the NATO summit that he "doesn't want anything to do with Spain. Please cut all trade with Spain." The decline in Madrid, however, was slightly cushioned by a 4.54% rise in oil company Repsol.
The military alliance reaffirmed its commitment to the defense of member countries and to funding to support Ukraine in the war against Russia, but despite the new agreements, the European defense sector suffered losses of 1.09%.
Still, HSBC analysts believe that eurozone stocks will outperform other regions in the second half of 2026, with a recovering macroeconomic environment supporting European stocks. A stronger dollar against the euro will result in positive revisions to euro-denominated earnings estimates, while the continent's banks look attractive, according to analysts.
*With information from Dow Jones Newswires.
